FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 1997

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period _______________________ to _________________________

Commission File Number    1-12902
                      --------------

                       FRONTIER ADJUSTERS OF AMERICA, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Arizona                                        86-0477573
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


                     45 East Monterey Way, Phoenix, AZ 85012
--------------------------------------------------------------------------------
                    (Address of principal executive offices)



                                 (602) 264-1061
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                       Yes  X      No
                                                           ---        ---


Number of shares of Common Stock outstanding on January 29, 1998      4,605,358
                                                                     -----------
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
-----------------------------

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                December 31, 1997     June 30, 1997
                                                                -----------------     -------------
                                                                   (unaudited)             (*)
<S>                                                               <C>                  <C>        
                                               ASSETS
                                               ------

CURRENT ASSETS
   Cash and cash equivalents                                      $   890,856          $ 1,012,233
   Investments                                                      1,262,554            1,288,976
   Receivables                                                      1,618,823            1,613,099
   Prepaid expenses                                                   232,248              268,192
   Other                                                              447,600              433,260
                                                                  -----------          -----------
        TOTAL CURRENT ASSETS                                        4,452,081            4,615,760
                                                                  -----------          -----------
                                                                                       
PROPERTY AND EQUIPMENT                                              2,513,902            2,453,819
   Less accumulated depreciation and amortization                    (792,858)            (717,593)
                                                                  -----------          -----------
                                                                    1,721,044            1,736,226
                                                                  -----------          -----------
                                                                                       
OTHER ASSETS                                                                           
   Cost of subsidiary in excess of net tangible assets acquired       213,817              213,817
   Less accumulated amortization                                     (177,974)            (176,818)
                                                                  -----------          -----------
                                                                       35,843               36,999
   Receivables (Long term)                                            412,000              431,000
   Investments (Long term)                                            694,643              714,872
   Other                                                              331,405              377,282
                                                                  -----------          -----------
                                                                    1,473,891            1,560,153
                                                                  -----------          -----------
        TOTAL ASSETS                                              $ 7,647,016          $ 7,912,139
                                                                  ===========          ===========
                                                                                       
                                                                                       
                                             LIABILITIES
                                             -----------
                                                                                       
CURRENT LIABILITIES                                                                    
   Accounts payable                                               $    32,929          $    33,793
   Accrued expenses                                                   330,343              190,510
   Franchisee/licensee remittance payable                             418,951              396,991
   Current portion long term liability                                 27,497               26,521
   Other                                                              159,697              666,669
                                                                  -----------          -----------
        TOTAL CURRENT LIABILITIES                                     969,417            1,314,484
                                                                  -----------          -----------
                                                                                       
LONG TERM LIABILITY                                                    19,465               33,462
                                                                  -----------          -----------
                                                                                       
STOCKHOLDERS' EQUITY                                                                   
   Common stock                                                        47,820               47,820
   Additional paid in capital                                       2,148,470            2,148,470
   Treasury stock                                                    (529,584)            (529,584)
   Other                                                               29,532               83,221
   Retained earnings                                                4,961,896            4,814,266
                                                                  -----------          -----------
                                                                    6,658,134            6,564,193
                                                                  -----------          -----------
   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                       $ 7,647,016          $ 7,912,139
                                                                  ===========          ===========
                                                                                    
*Condensed from audited financial statements.
 The accompanying notes are an integral part of these condensed statements.
</TABLE>
                                        2
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
<TABLE>
<CAPTION>
                                          Six Months Ended              Three Months Ended
                                          December 31,                  December 31,
                                          ----------------------        ---------------------
                                             1997           1996           1997          1996
                                             ----           ----           ----          ----
<S>                                       <C>            <C>            <C>            <C>       
REVENUES
   Continuing licensee and
    franchisee fees                       $2,341,906     $2,688,729     $1,121,804     $1,300,431
   Adjusting fees                            553,044        479,995        289,438        204,764
                                          ----------     ----------     ----------     ----------
                                           2,894,950      3,168,724      1,411,242      1,505,195
                                          ----------     ----------     ----------     ----------


COST AND EXPENSES
   Compensation and employee benefits      1,324,151      1,262,882        679,103        611,726
   Office                                    182,419        202,359         88,270        101,995
   Advertising and promotion                 124,583        140,088         64,582         58,891
   Depreciation and amortization             125,097        114,168         63,740         58,213
   Provision for doubtful accounts            96,000         90,000         48,000         45,000
   Other                                     334,770        369,032        147,701        159,626
                                          ----------     ----------     ----------     ----------
                                           2,187,020      2,178,529      1,091,396      1,035,451
                                          ----------     ----------     ----------     ----------
INCOME FROM OPERATIONS                       707,930        990,195        319,846        469,744
                                          ----------     ----------     ----------     ----------

OTHER INCOME (EXPENSE)
   Interest income                            69,850         74,176         33,384         37,985
   Other (Net)                                35,108         46,537         33,429         39,184
                                          ----------     ----------     ----------     ----------
   TOTAL OTHER INCOME (EXPENSE)              104,958        120,713         66,813         77,169
                                          ----------     ----------     ----------     ----------
   INCOME BEFORE INCOME TAXES                812,888      1,110,908        386,659        546,913


INCOME TAXES                                 319,855        438,798        152,268        217,066
                                          ----------     ----------     ----------     ----------
   NET INCOME                             $  493,033     $  672,110     $  234,391     $  329,847
                                          ==========     ==========     ==========     ==========


Weighted Average Shares
 outstanding                               4,605,358      4,610,021      4,605,358      4,605,358
                                          ==========     ==========     ==========     ==========

NET INCOME PER COMMON SHARE               $      .11     $      .15     $      .05     $      .07
                                          ==========     ==========     ==========     ==========
</TABLE>
The accompanying notes are an integral part of these condensed statements.
                                        3
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)

                   Six Months Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
                                                                    1997             1996
                                                                -----------      -----------
<S>                                                             <C>              <C>        
NET INCOME                                                      $   493,033      $   672,110
                                                                -----------      -----------
Adjustments to reconcile net income to net cash                
provided by operating activities:                              
   Depreciation and amortization:                              
        Operations                                                  125,048          114,168
        Other                                                         1,092              546
   (Gain) on sale of investments                                     (4,042)            --
   (Gain) on disposition of property and equipment                     (120)         (24,775)
   Allowance for doubtful accounts                                   96,000          (50,295)
Change in assets and liabilities:                              
(Increase) decrease in:                                        
   Receivables                                                       90,342          220,935
   Prepaid expenses                                                  35,944           86,760
   Other                                                            (71,656)         (45,959)
Increase (decrease) in:                                        
   Accounts payable                                                    (864)          20,993
   Accrued expenses                                                 139,833           13,170
   Franchisee and licensee remittance payable                        21,960          258,363
   Other                                                           (506,972)          14,304
                                                                -----------      -----------
Total adjustments                                                   (73,435)         608,210
                                                                -----------      -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                    419,598        1,280,320
                                                                -----------      -----------
                                                               
CASH FLOWS FROM INVESTING ACTIVITIES:                          
   Capital expenditures                                             (60,183)        (275,599)
   Investments purchased                                           (989,627)        (974,115)
   Proceeds from sales of investments                             1,040,000        1,000,000
   Proceeds on sale of fixed assets                                     200             --
   License acquisition                                                 --            (25,000)
   Payments on License acquisition                                  (13,021)         (18,113)
   Advances to licensees and franchisees                         (2,048,708)      (1,914,581)
   Collections of advances to licensees and franchisees           1,875,642        1,825,397
                                                                -----------      -----------
   NET CASH PROVIDED (USED IN) BY INVESTING ACTIVITIES             (195,697)        (382,011)
                                                                -----------      -----------
                                                               
CASH FLOWS FROM FINANCING ACTIVITIES:                          
   Cash dividends                                                  (345,403)        (345,949)
   Common stock repurchased                                            --            (44,365)
                                                                -----------      -----------
   NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES             (345,403)        (390,314)
                                                                -----------      -----------
   EFFECT OF EXCHANGE RATE CHANGES ON CASH                              125             --
                                                               
NET INCREASE (DECREASE) IN CASH                                    (121,377)         507,995
   Cash at beginning of the period                                1,012,233          534,540
                                                                -----------      -----------
   Cash at the end of the period                                $   890,856      $ 1,042,535
                                                                ===========      ===========
                                                               
Supplemental disclosures of Cash Flow information              
Cash paid during the period                                    
   Income taxes                                                 $   377,887      $   515,344
   Interest                                                     $     1,980      $     4,442
</TABLE>
The accompanying notes are an integral part of these condensed statements.
                                        4
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


(1) Basis of Presentation
    ---------------------

    The  financial  information  included  herein is  unaudited;  however,  such
    information reflects all adjustments  (consisting solely of normal recurring
    adjustments)  which are, in the opinion of management,  necessary for a fair
    statement of results of operations for the interim periods.

    The results of operations for the three and six month periods ended December
    31, 1997 are not  necessarily  indicative  of the results to be expected for
    the full year.

(2) Supplemental Cash Flow Information
    ----------------------------------

    Item 2 - Management's  Discussion  and Analysis  of Financial  Condition and
    Results of Operations

    The  statements  contained  in this  Report on Form 10-Q that are not purely
    historical are forward looking  statements within the meaning of Section 27A
    of the Securities Act of 1933, as amended, and Section 21E of the Securities
    Exchange  Act of  1934,  as  amended,  including  statements  regarding  the
    Company's  "expectations",   "anticipation",   "intentions",  "beliefs",  or
    "strategies"  regarding  the  future.  Forward  looking  statements  include
    statements regarding revenue, margins,  expenses, and earnings analysis with
    regard  to the  Company  or  with  regard  to the  Company's  licensees  and
    franchisees for the remainder of fiscal 1998 and thereafter; improvement of,
    and growth in the number of, licensees and  franchisees;  future spending on
    marketing and product  development  strategy;  and liquidity and anticipated
    availability of cash for operations,  acquisitions, or payment of dividends.
    All  forward  looking  statements  included  in this  Report  are  based  on
    information  available  to the Company on the date of this  Report,  and the
    Company assumes no obligation to update any such forward looking  statement.
    It is  important  to note that the  Company's  actual  results  could differ
    materially from those in such forward looking statements.  Among the factors
    that  could  cause  actual  results  to differ  materially  are the  factors
    discussed  in this  Report  and any  other  reports  on file  with  the SEC,
    including  but not limited to the extent and nature of natural  disasters in
    geographic   areas   serviced  by  the  Company  or  by  its  licensees  and
    franchisees;  management  decisions by insurance companies and self-insureds
    to increase  or  decrease  the degree to which they  contract  for  services
    offered by the Company, its licensees or franchisees;  the Company's ability
    to  identify  and attract  new  qualified  licensees  and  franchisees;  the
    Company's  ability to successfully  manage offices  reacquired from existing
    licensees  and  franchisees;  the  Company's  ability to attract  and retain
    national  and  regional  clients  for the  services  of the  Company and its
    licensees;  and  uninsured  liability for acts or omissions of the Company's
    employees, licensees, or franchisees.

    Financial Condition
    -------------------

    The Company has  historically  financed  its growth and on going  operations
    with cash  generated from  operations.  In the six months ended December 31,
    1997, the Company's operations generated $420,000 in cash.

    Compared to the last fiscal year, the most  significant  item affecting cash
    provided  by the  Company's  operations  is the  $507,000  decrease in other
    liabilities.  This decrease results from a $525,000 payment during the first
    quarter of fiscal 1998  pursuant to an agreement  the Company had entered in
    June 1997 to settle litigation.

    Through its capital  investment  program,  the Company replaces  obsolete or
    outdated  equipment and invests in new equipment and furnishings to maintain
    or increase the  productivity of the Company and its employees.  The Company
    anticipates  investing $200,000 to $300,000 in fiscal 1998 for equipment and
    furnishings pursuant to its capital investment program.

    Management  believes  that the Company  will be able to fund all of its cash
    requirements  (i.e.  current  operations,  capital asset acquisition and the
    payment  of  dividends)   from  currently   available  cash  generated  from
    operations.

    The Company's  ratio of current assets to current  liabilities was 4.59 to 1
    as of December 31, 1997 and 3.51 to 1 as of June 30, 1997.
                                        5
<PAGE>
Results of  Operations  - Six Months  Ended  December  31, 1997  Compared to Six
--------------------------------------------------------------------------------
Months Ended December 31, 1996
------------------------------

Revenues
--------

The Company's  revenues  decreased 8.6% or $274,000 to $2,895,000 during the six
months ended  December 31, 1997 from  $3,169,000 in the same period of the prior
fiscal year. This decrease  represents a combined  $73,000 increase in adjusting
and risk  management  fees and a $347,000  decrease in  continuing  licensee and
franchisee fees.

The increase of $73,000 in adjusting and risk  management  fees from $480,000 in
the six months  ended  December  31, 1996 to $553,000  for the six months  ended
December 31, 1997  represents a 15.2%  increase.  A significant  portion of this
increase is related to the Company's Las  Vegas/Henderson,  Nevada office, which
was  acquired  in the  last  quarter  of the  prior  fiscal  year  from a former
licensee.  This office  generated  $191,000 in adjusting fees for the six months
ended December 31, 1997.

The Company's  revenues from  continuing  licensee and franchisee fees decreased
12.9% or $347,000 from  $2,689,000 in the six months ended  December 31, 1996 to
$2,342,000 in the six months ended December 31, 1997. This decrease reflects the
loss  of  revenues  attributed  to a  client  which  contributed  18.8%  to  the
continuing  licensee  and  franchisee  fees in fiscal 1997.  In June 1997,  this
client  elected to place its  adjusting  service needs with other  vendors.  The
effects of this decision will be reflected in the Company's  revenues during the
remainder of 1998 fiscal year.

The Company's revenues are affected by numerous matters including the work loads
of  other  companies  and  claims  presented  by  their  clients.  The  Company,
therefore,  is unable to project its future revenues.  During the current fiscal
year,  the Company has  experienced  a decrease in revenues due primarily to the
phase out of its business  relationship  with a client which accounted for 18.8%
of continuing  licensee and  franchisee  fees. The Company has responded to this
loss  of  revenue  by  investing   substantial  resources  to  establish  a  new
promotional  and  marketing  program  and  anticipates  that  over time the lost
business  will be  replaced.  As a result,  the  Company  hopes to see growth in
licensee and franchisee fees paid from other sources.  During December 1997, the
Company successfully  completed  negotiations for national/regional  agreements,
with one new client and with three existing clients for additional services.  In
addition,  the Company  believes that it will  continue to realize  growth as it
adds additional qualified licensees and franchisees.

Compensation and Fringe Benefits
--------------------------------

Compensation and fringe benefits  represent  approximately  61% of the Company's
costs and  expenses  and  represent  the largest  single item of expense.  These
expenses  increased  5% or  $61,000  from  $1,263,000  in the six  months  ended
December 31, 1996 to $1,324,000  in the current six month period.  This increase
is the result of the addition of a Marketing Director to the Company's corporate
staff,  the new employees in Las  Vegas/Henderson,  Nevada,  as a result of that
acquisition,  additional employees hired including temporary employees to handle
increased  work  loads in the  Corporate  office  and cost of  living  and merit
increases given to employees.

Expenses Other Than Compensation and Fringe Benefits
----------------------------------------------------

The Company's  expenses other than  compensation  and fringe benefits  decreased
$53,000  during the six months  ended  December 31, 1997 as compared to the same
period of the prior fiscal year. The principal  items  affecting  these expenses
are a $34,000  decrease in legal  expenses,  a $11,000  increase in depreciation
expense due to capital  expenditures in the prior fiscal year,  $20,000 decrease
in office expenses, and a $15,000 decrease in advertising and promotion expense.

The balance of the Company's costs and expenses have not  significantly  changed
from the same period of the prior year.

Income Taxes
------------

The Company's  income taxes for the six months ended December 31, 1997, were 39%
of its income before taxes, or  approximately  the same as they were in the same
period of the prior fiscal year.  Changes made in the tax laws by various states
and by the federal  government  have not had a material  effect on the Company's
current overall tax rates, however, there is no assurance that such changes will
not occur in the future.
                                        6
<PAGE>
Other Income
------------

The Company's other income  decreased  $16,000 or 13.2% from $121,000 in the six
months ended December 31, 1996 to $105,000 in the current six month period.  The
most  significant  items  affecting  other  income  are  a  $4,000  decrease  in
investment  income,  a $25,000  decrease in gains on the  disposition of capital
equipment and an $18,000 increase in dividend income.

Net Income
----------

The Company's net income for the six months ended  December 31, 1997,  decreased
$179,000 or 26.6% from  $672,000 in the six months  ended  December  31, 1996 to
$493,000 in the current period.  The most significant items affecting net income
were a $274,000  decrease in revenues,  a $61,000  increase in compensation  and
fringe benefits and a $53,000  decrease in expenses other than  compensation and
fringe benefits.

Results of  Operations - Three Months Ended  December 31, 1997 Compared to Three
--------------------------------------------------------------------------------
Months Ended December 31, 1996
------------------------------

Revenues
--------

The  Company's  revenues  decreased  6.2% or $94,000 to  $1,411,000 in the three
months ended  December 31, 1997 from  $1,505,000 in the same period of the prior
fiscal year. This decrease  represents a combined  $84,000 increase in adjusting
and risk  management  fees and a $178,000  decrease in  continuing  licensee and
franchisee fees.

The increase of $84,000 in  adjusting  and other fees of Company  owned  offices
from  $205,000 in the three  months  ended  December 31, 1996 to $289,000 in the
three months ended  December 31, 1997  represented a 41% increase.  The increase
reflects  an increase  in the demand for the  Company's  services in the Phoenix
area  as  well  as  revenues  from  the  Company's   Tucson,   Arizona  and  Las
Vegas/Henderson, Nevada operations.

The Company's  revenues from  continuing  licensee and franchisee fees decreased
13.7% or $178,000 from $1,300,000 in the three months ended December 31, 1996 to
$1,122,000 in the three months ended December 31, 1997.  This decrease  reflects
the loss of  revenues  attributed  to a client  which  contributed  18.8% to the
continuing  licensee  and  franchisee  fees in fiscal 1997.  In June 1997,  this
client  elected to place its  adjusting  service needs with other  vendors.  The
effects of this decision will be reflected in the Company's  revenues during the
1998 fiscal year.

The Company's revenues are affected by numerous matters including the work loads
of  other  companies  and  claims  presented  by  their  clients.  The  Company,
therefore,  is unable to project its future revenues.  During the current fiscal
year,  the Company has  experienced  a decrease in revenues due primarily to the
phase out of its business  relationship  with its major client.  The Company has
responded  to  this  loss of  revenue  by  investing  substantial  resources  to
establish a new promotional and marketing program and anticipates that over time
the lost business will be replaced. As a result, the Company hopes to see growth
in licensee and franchisee  fees paid from other sources.  During December 1997,
the  Company   successfully   completed   negotiations   for   national/regional
agreements,  with one new client and with three existing  clients for additional
services.  In addition,  the Company  believes  that it will continue to realize
growth as it adds additional qualified licensees and franchisees.

Compensation and Fringe Benefits
--------------------------------

Compensation and fringe benefits represented  approximately 62% of the Company's
costs and  expenses  and  represent  the largest  single item of expense.  These
expenses  increased  10.9% or $67,000  from  $612,000 in the three  months ended
December 31, 1996 to $679,000 in the three months ended  December 31, 1997.  The
increase is the result of the addition of a Marketing  Director to the Company's
corporate staff, the new employees in Las  Vegas/Henderson,  Nevada, as a result
of that acquisition, the addition of employees to handle the increased work load
in the  Corporate  office,  and for cost of  living  and merit  raises  given to
employees.

Expenses Other Than Compensation and Fringe Benefits
----------------------------------------------------

The Company's  expenses other than  compensation  and fringe benefits  decreased
$12,000  during the three months ended December 31, 1997 as compared to the same
quarter of the prior fiscal year. The principal  items  affecting these expenses
were a $6,000 decrease in legal  expenses,  a $6,000 increase in advertising and
promotion expenses,  a $14,000 decrease in office expenses and a $6,000 increase
in depreciation and amortization.

The balance of the Company's  costs and expenses did not  significantly  changed
from the same period of the prior fiscal year.
                                        7
<PAGE>
Income Taxes
------------

The Company's  income taxes for the three months ended  December 31, 1997,  were
39% of its income before taxes,  or  approximately  the same as they were in the
same period of the prior  fiscal  year.  Changes made in the tax laws by various
states and by federal government did not have a material effect on the Company's
overall tax rates.

Other Income
------------

The Company's  other income  decreased  $10,000 or 13% from $77,000 in the three
months ended December 31, 1996 to $67,000 in the three months ended December 31,
1997.  The most  significant  items  affecting  other income are the decrease in
gains on disposition of fixed assets of $24,000, an $18,000 increase in dividend
income, and a $5,000 decrease in interest income.

Net Income
----------

The Company's net income for the three months ended December 31, 1997, decreased
$96,000 or 29.1% from  $330,000 in the three months  ended  December 31, 1996 to
$234,000.  The most  significant  items  affecting  net income  were the $94,000
decrease in revenues,  the $67,000  increase in compensation and fringe benefits
and the $12,000 decrease in other expenses.


PART II:  OTHER INFORMATION

Item 1 - Legal Proceedings

From time to time in the normal course of its business,  the Company is named as
a defendant in lawsuits.  The Company does not believe that it is subject to any
such lawsuits or litigation or threatened  lawsuits or litigation that will have
a material adverse effect on the Company or its business.

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                           FRONTIER ADJUSTERS OF AMERICA, INC.



Date:   1/29/98            /s/        William J. Rocke
     ------------           ----------------------------------------------------
                           William  J. Rocke, Chief  Executive  Officer/Chairman
                           of the Board, Director, Principal Financial Officer


Date:   1/29/98             /s/       Patric R. Greer
     ------------           ----------------------------------------------------
                            Patric R. Greer, Chief Financial Officer, Controller

                                       8